New 14A From TPL Management

14A at Edgar

Management Holdings

Looks like the content from the annual report which is typically more in depth than the 10k.

Some detail on the water biz is included:

In 2018, the Trust reported $209.7 million of net income, the highest in its 131 year history. This was due to a 94.1% increase in gross revenue to $300.2 million in 2018 compared to $154.6 million in 2017. Net income per Sub-share certificate increased 117.5% to $26.93 in 2018 compared to $12.38 in 2017. These increases in revenue and net income are due to a continued increase in development activity in the Permian Basin and the Trust’s strategic focus to maximize revenue from its approximately 900,000 acres of land.

Part of that strategic focus involved the creation of Texas Pacific Water Resources LLC (“TPWR”) in June 2017. Drilling and completion activity in the Permian Basin continues to rise as operators are increasing their focus on development of leaseholds throughout the basin. Longer well laterals combined with large water load frac design, due to high proppant (sand or similar particulate) load and carrying limits, continue to drive the need for increased water demand for fracturing activities. TPWR, a wholly owned subsidiary of the Trust, focuses on providing a full-service water offering to operators in the Permian Basin. These services include brackish (briny, non-potable) water sourcing, produced-water gathering/treatment/recycling, infrastructure development/construction, disposal, water tracking, analytics and well testing services. TPWR is committed to sustainable water development with significant focus on the large-scale implementation of recycled water operations.

As of December 31, 2018, TPWR continues to build out its water production, storage and delivery infrastructure system in the Permian Basin. TPWR has entered into multiple sourcing contracts with oil and gas operators throughout the basin to provide water to the operators. While several projects are currently functional, construction is ongoing to add additional capacity.

TPWR also performs produced water treatment services for multiple operators. This service is typically performed using a TPWR constructed mobile water treatment system which is capable of treating up to 40,000 bbls/day. We anticipate adding additional treatment systems throughout the course of 2019.

During the year ended December 31, 2018, the Trust invested approximately $35.2 million in TPWR projects to develop brackish water sourcing and treatment system assets. In its first full fiscal year of operation, TPWR generated $88.7 million in gross revenue consisting of $63.9 million in water sales and royalties and $24.8 million in easements and sundry income.

Also, PR contacts have been listed:

Contacts:

Media:

Abernathy MacGregor

Sydney Isaacs

(713) 343-0427

sri@abmac.com

 

Investor Relations:

MacKenzie Partners

Paul Schulman

(212) 929-5364

pschulman@mackenziepartners.com

6 thoughts on “New 14A From TPL Management

  1. So let me get this straight they bought land in Hudspeth and Concho counties. There are no drilling activity to speak of in those counties. What are the general agents for the trust doing?

    It is time to change this trust.

    Looking back on TPL’s over 120 year history anytime they tried to become active it turned out bad. Why do you think Chevron owns all the fee acreage they do. You guessed it. It came from TPL in 1954 through TXL.

    Anybody who is a shareholder should not vote for the current structure. It is very flawed. There need to be major changes done to the trust.

    Liked by 1 person

  2. The one interesting thing i took away from this filing is that they made $123m in revenue from 338 wells last year. That’s an average of $336k per well and they have 309 DUCs. Doing some quick math here, TPL could realize ~$113m in revenue from these DUCs whenever they come online if we assume that 336k in revenue for the DUCs. If we assume net margins of ~62%, then this would add about $9 per share in EPS. All things being equal. TPL would have an EPS of ~$36. Multiply this number by their historical median PE multiple of 27, and TPL is worth $972 a share. Personally, I think this is a low estimate given that we should also see growth in the water business as completions of these DUCs increases once there is more takeaway capacity in the Permian.

    Liked by 1 person

  3. How could anybody agree to less governance over more governance. It’s not about the trustees or management its about the holders that invest their hard earned $ .

    Liked by 1 person

      • Conflict often brings the best results. I’m not saying I have all the answers but this might be the only chance shareholders have chance to get representation in the next 10+ years. Why not get someone that has experience and significant skin in the game?

        Like

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